Best Individual Life Insurance Plans for Canadians

Buying individual life insurance is a lot like any other purchase.

Whether it’s an Amazon purchase or booking a flight, you’re always looking for the best bang for your buck. After all, you want the best product at the best price possible. 

See the similarity? This same mentality applies when you're looking for an individual life insurance plan. You don’t want just any policy – you want the best coverage at the most affordable price. 

The good news? It doesn’t have to be a headache to find.

In this article, we’ll go over how you find the best individual life insurance plans for your exact needs, and even share some reviews for the best life insurance in Canada

Let’s get started!

Why Individuals Need Life Insurance

Life insurance may sound complicated, but it’s pretty simple in reality. Life insurance is a safety net for the people who depend on you financially. It guarantees that they’ll be able to cover their expenses and maintain their lifestyle if something happens and your income isn’t around to support them anymore. 

Even as an individual, you might have people who depend on you financially – think of kids if you’re  a single parent or aging parents. This applies whether you’re their sole support or if you share the financial responsibility. In either case, your income is part of the financial pie that someone relies on to live. If it suddenly disappears, it could leave someone you love in a financial bind. 

That’s where life insurance comes in. When you buy an individual life insurance policy, you pay monthly premiums to cover the cost of your coverage. If you die while your policy is active, your insurance company will give your beneficiary a tax-free lump sum payment that equals your policy coverage amount. In insurance lingo, this payment is called the “death benefit." 

Your beneficiaries can use your death benefit in any way they want. It can go towards university tuition, mortgage payments, healthcare costs, or everyday expenses. 

When Should You Buy Individual Life Insurance?

Let’s start with when you shouldn’t buy life insurance as an individual.

If you’re single and don’t have kids or aging parents, you probably don’t need life insurance. If there’s no one who depends on your income, there’s no one who would be affected financially if you died and your income disappeared. 

It’s a good idea to secure a life insurance policy as soon as you have someone who depends on you financially.  

If you’re young and healthy, you may be thinking you can save some money by waiting until you’re older before you buy coverage. But you don’t have a crystal ball – there’s no way to know for sure what’s to come for the next few years. Maybe a health scare! . And remember, life insurance rates also increase as you age, even if you stay healthy. 

That’s why it’s important to buy life insurance as soon as you need it. This way, you’ll be able to lock in a lower rate and you’ll sleep better at night knowing that your loved ones are protected financially.  

Types of Life Insurance for Individuals

Decided to start shopping? 

When you buy an individual life insurance policy, you can choose between two types of coverage: term life insurance and permanent life insurance. 

Let’s break down the differences. 

Term Life Insurance

Term life insurance is a type life insurance that has a set timeline. You pick the length of your plan at time of purchase, and pay premiums for that length of time.

When you buy term life insurance, you get coverage for a certain number of years (usually, 10, 20, or 30). If you die during your policy term, your insurance company will pay out your death benefit to your beneficiary. 

Most individuals end up buying term insurance because they need coverage only during the years when they expect to have dependents. By choosing term life insurance, you know that you’re paying for coverage only during the years when you’ll actually need it. And because your insurer won’t need to cover you for the rest of your life, they’ll charge you much less for term insurance than for permanent insurance. 

Permanent Life Insurance

Whereas term life insurance covers you for a fixed period of time, permanent life insurance covers you for the rest of your life. This means that your beneficiary is guaranteed to receive your death benefit – it’s just a matter of when they’ll get it. 

Because insurance companies always have to pay out the death benefit for a permanent insurance policy, permanent insurance is much more expensive than term life insurance. Unless you actually need coverage for the rest of your life (which most people don’t), you’re better off getting term insurance. 

Here’s how rates for term vs. permanent insurance compare:

$250,000 20-year term life insurance$250,000 permanent life insurance
Male, aged 30$18/month$135/month
Female, aged 30$15/month$121/month
Male, aged 40$28/month$204/month
Female, aged 40$22/month$178/month
Male, aged 50$72/month$327/month
Female, aged 50$51/month$279/month

How to Find the Best Individual Life Insurance Plan

What should you look for when hunting for the best life insurance for individuals in Canada? Pay attention to these 3 criteria: 

  • Financial health: Want to be sure that your beneficiary will actually get your death benefit if you die close to the end of a 30-year term policy? Look for an insurer that’s in tip-top financial shape. Fortunately, because most Canadian insurance companies are in excellent financial health, you don’t have to worry too much about this one. 
  • Electronic application and document delivery: You’ll end up waiting longer for coverage if your insurer is old school and still wants to receive paper applications and deliver policy documents as hard copies. That’s why it’s smart to choose an insurer that accepts e-applications and delivers policy documents electronically. 
  • Price: On Amazon, a brand that’s offering a lower price can be a serious red flag. But in the insurance world, a lower price usually just means that a company is pricing a policy more aggressively to win you over as a customer. That’s why we usually recommend choosing the company that gives you the lowest price. 

So, What’s The Top Pick for Individual Life Insurance Plans?

Want our recommendation? Based on PolicyMe’s analysis, Wawanesa offers the best life insurance for individuals in Canada. Although Wawanesa is based in Manitoba, it’s licensed in all Canadian provinces and has an A (excellent) rating. 

What makes Wawanesa such a great option for individuals? They have some of the lowest prices for all age groups, and they offer a range of policy terms, such as 10-, 15-, 20-, 25-, and 30-year policy lengths. 

On top of this flexibility and affordability, Wawanesa makes policy laddering easy. With policy laddering, you can get multiple policies with different coverage amounts and policy lengths over time based on your needs and budget. This is helpful if you can’t afford all the coverage you need right away or if you want separate policies to cover specific needs. 

Wondering how other Canadian insurance companies stack up? Check out our reviews of Canada’s top insurers in 2020.